USDA Sees Lower 2024 Beef Production

Although the USDA’s, National Agricultural Statistics Service’s commercial slaughter estimates for December aren’t scheduled for publication until later this month, the USDA’s Agricultural Marketing Service has published Actual Slaughter Under Federal Inspection through the end of the year, which allows for year-to-year comparison.

The USDA’s Livestock, Dairy, and Poultry Outlook from Friday said in 2023, all classes of slaughter were down from 2022.  However, the proportion of heifers and cows in the slaughter mix was higher than anticipated a year ago.

 

LOST EXPECTATIONS

 

Many expected that as drought from 2020–22 receded, pasture conditions would improve, calf prices would rise, and producers would be more willing to retain heifers and cows to maintain or expand their herds, the report said.

At 42.1%, the weekly average percent of cow and heifer slaughter last year was the second-highest since the series began in 1986, behind the 2022 record of 42.3%, the USDA said.  Reflecting preliminary slaughter data for the month of December, the USDA’s fourth-quarter 2023 production estimate was raised from last month.

The change reflects a marginal increase in fed cattle and bull slaughter from December’s forecast, the USDA said.  That increase was partially offset by less cow slaughter.

The largest effect on the forecast was an adjustment in carcass weights, the report said.  Heavier carcass weights likely reflect a relatively large proportion of steers and heifers in the slaughter mix and general weight gains by steers and heifers coming out of feedlots.

As a result, total commercial beef production in 2023 now is estimated to have been 26.967 billion pounds, a decline of almost 5% from 2022.

 

PRODUCTION FORECAST RAISED

 

According to the latest Cattle on Feed report, the Dec. 1 feedlot inventory was 12.006 million head, almost 3% more than the 11.693 million in 2022, the USDA report said.  Feedlot net placements1 in November were nearly 2% lower at 1.814 million head.

November marketings tallied 1.751 million head, down more than 7% from a year ago, the USDA said.  The relatively large decline kept most feedlots fuller than a year ago.

The number of cattle on feed in Texas and Kansas was up 4% and 7% from last year, while Nebraska was down 1%, the report said.

Jan. 31, the USDA’s NASS is to release the semi-annual Cattle (Inventory) report, the Outlook report said.  This report estimates the number of cows and heifers available for breeding, as well as insight into calves available for placement in feedlots in early 2024 that will be marketed later in the year.

The 2024 beef production forecast was raised 120 million pounds from last month to 26.110 billion, a decline of just over 3% from 2023, the USDA said.

 

CATTLE, BEEF RECAP

 

The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $174.04 per cwt to $174.60, compared with last week’s range of $172.05 to $175.34 per cwt.  FOB dressed steers, and heifers went for $272.66 per cwt to $272.68, compared with $270.93 to $277.08.

The USDA choice cutout Monday was up $3.17 per cwt at $298.67 while select was up $3.53 at $286.58.  The choice/select spread narrowed to $12.09 from $12.45 with 61 loads of fabricated product and 18 loads of trimmings and grinds sold into the spot market.

The USDA said basis bids for corn from feeders in the Southern Plains were up $0.08 to $0.09 at $1.33 to $1.44 a bushel over the Mar corn contract, which settled at $4.45 3/4 a bushel, up $0.00 1/4.

The CME Feeder Cattle Index for the seven days ended Friday was $228.51 per cwt, up $1.25.  This compares with Monday’s Jan contract settlement of $229.82, down $0.27.